November 30, 2012UncategorizedComments Off on Loizos Michaels found guilty of 31 charges involving financial fraud

Press Release – Serious Fraud Office
Loizos Michaels (45) was today found guilty in the Auckland District Court of Crimes Act charges laid by the Serious Fraud Office (SFO). After defending charges of obtaining by deception or causing loss by deception in an eight-week trial, Mr Michaels was found guilty of 31 charges by Judge Field. The charges each carry a maximum penalty of seven years.

The long and complex SFO investigation resulted in Mr Michaels being accused of inducing investors to pay him large sums of cash on the basis of a series of highly persuasive but false representations.

The ensuing hearing disclosed colourful details of Mr Michaels’ elaborate and increasingly complex and extreme deceptions. These included claims that he:

– had wealthy Greek Cypriot family contacts;
– had personal and business relationships with leading Asian and Pacific casino owners;
– was orchestrating a takeover bid for the Sky City casino group;
– was involved in an array of other property developments and overseas projects
– had knowledge of death threats against investors
– had the support of high profile members of the community
– had relationships with a broad range of individuals from Belgium bank managers to law firms to the Hells Angels and Yakuza criminal gang.

The SFO investigation established that the majority of these claims were fabricated.

The period of offending in New Zealand was from March 2007 to August 2008. The total ‘investments’ given to Mr Michaels and investigated by the SFO were in excess of $3 million.

Acting Chief Executive of the SFO, Mr Simon McArley said, “Mr Michaels represents a hazard to the community and we are pleased that we have been able to address this.”

However, Simon McArley warned that Mr Michaels’ case was not typical of financial crime in New Zealand.

“While Mr Michaels’ case is highly colourful, it would be a mistake to assume that it is representative of the majority of financial crime. Those that commit financial crime come in all varieties, but experience has shown that some of the most impactful financial crime arises from activities of highly credible and everyday individuals. The SFO will remain focused on prevention and early intervention across the broad spectrum of financial crime in New Zealand,” he said.

The SFO acknowledged the co-operation and assistance of the Queensland State Police who provided evidence of similar conduct by Mr Michaels while in Australia for use in the New Zealand trial, and both the Victorian and Queensland State Police who assisted in apprehension, detention and subsequent extradition of Mr Michaels after his failure to return to a Court hearing in New Zealand.

Background information
Loizos Michaels is known to use numerous aliases, including Michael Loizos, Michael Lozis, Michael Loizis, Michael Loizou, Michael Loizs and Michael Callis. His correct identity according to his Australian Passport is Loizos Michaels. He is 45 years of age. He is believed to have been born in Cyprus, but grew up in Melbourne Australia.Crimes Act Offences
Section 240 Obtaining by deception or causing loss by deception
(1) Every one is guilty of obtaining by deception or causing loss by deception who, by any deception and without claim of right,—
(a) obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly; or
(b) in incurring any debt or liability, obtains credit; or
(c) induces or causes any other person to deliver over, execute, make, accept, endorse, destroy, or alter any document or thing capable of being used to derive a pecuniary advantage; or
(d) causes loss to any other person.

(2) In this section, deception means—
(a) a false representation, whether oral, documentary, or by conduct, where the person making the representation intends to deceive any other person and—
(i) knows that it is false in a material particular; or
(ii) is reckless as to whether it is false in a material particular; or
(b) an omission to disclose a material particular, with intent to deceive any person, in circumstances where there is a duty to disclose it; or
(c) a fraudulent device, trick, or stratagem used with intent to deceive any person.

Role of the SFO
The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.
The SFO operates three investigative teams:
• Evaluation & Intelligence;
• Financial Markets & Corporate Fraud; and
• Fraud & Corruption.

The SFO operates under two sets of investigative powers.

Part I of the SFO Act provides that it may act where the Director “has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.”

Part II of the SFO Act provides the SFO with more extensive powers where: “…the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed…”
The SFO’s Annual Report 2012 sets out its achievements for the past year, while the Statement of Intent 2012-2015 sets out the SFO’s three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz